Indra Nooyi: Making Time for Yale

Indra Nooyi '80MPPM, who as Pepscio CEO is still engaged with Yale in many ways, spoke at the YWAA scholarship banquet in 2003 (top, L). Merrell Clark '57 '70MAR presented the Yale Outstanding Service Award to Michael Gewitz '70. (YWAA, Yale photos)

In her corporate offices in Purchase, Indra Nooyi '80MPPM, Pepsico CEO and Yale SOM graduate, has a monumental agenda of items, most requiring immediate attention and decisive responses. As the leader of a global operation, everywhere she turns, there are decisions to make, strategies to execute and responses to deliver to numerous constituencies (shareholders, shareholder activists, board members, senior managers, and employees around the world), all watching keenly every move she makes, every directive she delivers to Pepsico operations managers.

The job is a grueling task, as it would be for any top executive of a company with a presence in all parts of the world and with over 250,000 employees, multiple business lines and product groups, major subsidiaries, and a complex network of franchisees and bottling companies. And, yes, there are the constituent groups--the shareholders, the consumers, consumer groups, communities, governments, and the business media--that all want a say-so in corporate matters.

The company is performing well, generating gobs of cash flow, keeping costs under control, and paying huge dividends and conducting stock repurchases to keep anxious shareholders off her back and comfortably pleased with her efforts and bold moves. (The stock price has increased about 25% the past two years.)

Yet somewhere in her long list of things to do, Nooyi allocates time for Yale, whether that involves her time as a trustee of the Yale Corporation, as a sometime speaker at Yale SOM or at Yale gatherings in New Haven and among alumni around the country, or as a hostess for Westchester events, where she has occasionally offered Pepsico facilities for Yale alumni functions.

For now, what are the dominating items on that daunting Pepsico agenda list, one that is analyzed by stock markets unrelentingly, reviewed and hashed out among financial journalists at major news organizations? (A Fortune magazine reporter last month featured her in a major story, accompanying her on corporate rounds and observing her hands-on-all-matters management style--management by immersion.)

Shareholder activists want a miracle (and want to get her stock price up beyond $110/share).  They want surging revenue growth, even more product lines, and more product innovation.  They are also pressing her hard to find a long-term solution to the health risks tied directly to Pepsico's most beloved products (high-sugar cola drinks and salty snacks).

Shareholder factions have pushed, but Nooyi pushes back and outlines for them a program, plan and strategy. In the process, the company continues to crank out over $65 billion in sales year after year, accompanied by earnings that top $6 billion. On top of such performance, she and her board provide handsome shareholder rewards in the way of high returns on capital and $3 billion-plus dividends. No one doubts Pepsico will generate the same in 2015.

A Daunting To-Do List

Nooyi's agenda list is long and complicated. She must address item by item, using experiences she gained from years as a management consultant and as a finance executive in the beverage industry (including her stint as a CFO at Pepsico).  Her Yale training helps.  Her time at Yale was pivotal, arguably a nexus in her career that pointed her into the direction of her CEO seat in Purchase.

Nooyi came to Yale SOM after obtaining undergraduate and business degrees in her native India. Yale took a chance on her, a student of sparse means from a country and culture far removed from Connecticut.  But she took a chance on Yale's new business school, or organization and management school, as it was often referred to back then.

Nooyi was a student at SOM in its early, formative years, when the degree it offered was an MPPM (public policy and management) and when students prepared themselves just as much for long careers in Washington, as much as Wall Street. Yale SOM steered her into the direction of consulting, which eventually led to the beverage industry.  Through the process, from India to Purchase, she amassed skills and used drive, intellect, wit, and compassion to move progressively to the top of one of the Fortune 500 list's best known companies and one of world's most familiar brands.

At Pepsico, back to her agenda list:  Nooyi must continue developing strategy to address health-related concerns and provide convincing solutions while not jeopardizing revenues, cash flow, market niche, and precious dividend payouts.  If she could, she would wave a wand and the potential health hazards from drinking cola products or eating certain snacks would be erased completely.  But she and her team tackle the agenda item, as if the solution is one major research step away or will result from a variation of other strategies she launched.

She must also face off against strong, familiar competition (Coca-Cola, notably) and try to keep Purchase the capital of the beverage industry, not Atlanta. While revenues swarm in, she must keep costs contained, whether they are tied to relationships with bottling companies or operations at Frito-Lay, Tropicana, and Quaker Oats. She must continue to expand, diversify and keep the $10 billion annual cash-flow machine flowing to keep all constituents (which, for her, includes the communities in which the company operates) happy.

"I think leadership is a personal thing," she said in a 2010 Yale Daily News story about her. "I don't think any CEO can pattern themselves after anybody."

...and for Yale

Still, there is always time left for Yale. Besides her tenure as a Successor Trustee for the Yale Corporation, she and her husband Raj, a management consultant, sent one of her two daughters to Yale SOM.

She served on SOM's Board of Advisers and returns occasionally to SOM to speak to students in the school's Leaders Forum. In 1997, she was a lead speaker at a "Women in Business" forum on campus.  In 2010 at Yale, she discussed her initiative (or imperative?), "Performance with Purpose," which recommends business leaders be mindful of their communities and the environment while they are intent on maximizing shareholder returns. She urged all food companies to provide healthy food choices to consumers and all companies everywhere to focus better on a more diverse and inclusive workplace.

"The goal is to intimately link what the company can do with what society requires," she told students.

In Westchester, beyond hosting events at Pepsico (including presentations in recent years by then-president Richard Levin ' 74 PhD and past AYA Executive Director Mark Dollhopf '77), Nooyi has met with YWAA board members and was a speaker at the Yale Outstanding Service Award banquet in White Plains in Oct., 2003.

"Her remarks were amazingly interesting and evocative," Merrell Clark '57 '70MAR wrote recently.

"She talked about what it was like to be (a senior leader) of Pepsico in human terms, including how she got along with the 'inner family' of the company and how she managed to provide time for her husband and children in a suburb away from the company."

Clark added, "She talked about how she was leading the company toward products that would be not just good, but good for you. She wanted the company to put greater emphasis on making all of their products better for the health of people, as well as for their enjoyment. She wanted the company to continue its admirable record of caring for the health and wellness of employees, to develop the same attitude about the impact of the company on its communities and on its world's physical environment."

Nooyi is often recognized for being one of a handful of women leading Fortune 500 companies. Whenever media publications compile lists of women in power or influence or women in visible, impactful leadership roles, her name routinely appears near the top.  Because of Pepsico's consistent performance and because of its brand and familiarity among consumers, her name often appears near the top of "power" lists  for women and men.

She likes to describe to herself as the the consummate people-oriented leader, notwithstanding a quantitative background that groomed her to be the consummate finance manager. (She studied physics, chemistry and math as an undergraduate.)  "You have got to show passions for business and the people," she summarized in the Yale Daily News. "You have to treat each person as though they are the most important person in that company."

SUNY-Purchase, with its campus just across the street from Nooyi's Pepsico headquarters in Westchester, awarded her an honorary doctorate degree this past May and cited her "Performance with Purpose" business philosophy and her "commitment to improving the lives of people around the globe."

"As we outgrow old ways of thinking about people," Clark said, "I hope it is not lost that Indra, being a woman and head of one of the top 100 companies, is much more than a novelty of the times and the impulse to advance women. The quality of Indra's mind and her character as a leader is what distinguishes this person. She probably would be CEO of any major company."

Nooyi has spoken often at Yale gatherings on campus and around the country (Yale photos).